Chisholm-Mingo Struggles To Survive

One of a few large wholly African American-owned ad firms, Chisholm-Mingo Group Inc. filed for Chapter 11 bankruptcy last fall. Industry experts are now saying that poor management plus the inability of the New York City-based firm (No. 5 on the BE ADVERTISING AGENCIES list with $100 million in billings) to provide a broad base of services to clients and to land Hispanic- or Asian-oriented accounts along with black or “urban” ones may have been at the root of its growing troubles.

The agency’s chairman and CEO, Samuel Chisholm, cites economic setbacks stemming from the Sept. 11, 2001, terrorist attacks and a decline in the number of companies marketing to African Americans as contributing to the firm’s financial woes. CMG was unable to pay its creditors on a timely basis. “What we didn’t do as quickly as we should have was to cut expenses,” says Chisolm. This would have meant cutting staff and moving to a smaller space to lower overhead costs. Chisholm has cut staff by nearly 50% and plans to reorganize the business further, with hopes that the firm will be back on its feet in six to 12 months.

Founded in 1977, the firm’s clients include Anheuser-Busch, the U.S. Navy, and Royal Caribbean Cruise Lines. Ad market analysts have varied takes on how CMG’s traditional way of running the business, which includes focusing on black advertising, may have hurt the agency.

“Other ad agencies are starting to provide a range of services. They are doing public relations and events,” for instance, says Ken Smikle, president of Chicago-based Target Market News. Smikle adds CMG wasn’t competitive enough in going after new talent in the industry. “It has become tougher for small shops to compete with general market shops.”

In recent years, three of the top five 2003 BE ADVERTISING AGENCIES took on white partners. GlobalHue (No. 1 with $350 million in billings) merged with True North, later purchased by Interpublic. WPP Group has a 49% stake in UniWorld Group Inc. (No. 2 with $232 million in billings), and Chicago-based Burrell Communications Group L.L.C. (No. 3 with $181 million in billings) merged with Publicis. Besides CMG, the burgeoning Oakland, California, powerhouse Carol H. Williams Advertising (No. 4 with $130 million in billings) has remained solely black-owned.